Senate panel OKs health insurance bill

Tuesday

May 29, 2007 at 12:01 AMMay 29, 2007 at 2:20 PM

SPRINGFIELD -- A legislative committee on Tuesday set the stage for the full Senate to vote on Gov. Rod Blagojevich’s universal health insurance proposal, even though lawmakers cannot agree on how to fully fund it.

Dana Heupel

By DANA HEUPEL

STATE CAPITOL BUREAU

SPRINGFIELD -- A legislative committee on Tuesday set the stage for the full Senate to vote on Gov. Rod Blagojevich’s universal health insurance proposal, even though lawmakers cannot agree on how to fully fund it.

The Senate Public Health Committee approved an amendment to allow businesses to exclude high-salaried executives and employees covered by outside health insurance from calculations on whether the company spends at least 4 percent of its payroll on health insurance for its workers. Under the governor’s plan, companies that don’t meet that 4 percent threshold will be taxed 3 percent of their payroll.

“This would help to eliminated the two problem areas that employers might have had,” said Sen. Dave Koehler, D-Peoria, who sponsored the amendment to Senate Bill 5.

Michael McRaith, director of the Illinois Division of Insurance, said the two exemptions would cost 10 percent to 25 percent of the $1.1 billion the tax would raise to help pay for the universal health insurance plan. To compensate for that amount, Koehler’s amendment also eliminated a credit against the tax for companies that spend from 2.5 percent to 4 percent of their payroll on health insurance.

“If these two things are taken into account, any employer that does not meet that 4 percent threshold is probably presumed correctly to be underinsuring their employees,” Koehler said.

David Eldridge, legislative director of the Taxpayers’ Federation of Illinois, said removing the partial credits “promotes the tax rather than in-house health care, as far as we’re concerned.”

He said the taxpayers’ group also objects to the legislation because it would not fully fund Blagojevich’s expansive program. McRaith estimated the 3 percent payroll tax would raise $1.1 billion annually. The governor’s office has estimated the program, called Illinois Covered, would cost an additional $2.1 billion.

As the scheduled May 31 adjournment of the General Assembly’s spring session draws near, lawmakers and the governor are wrangling over how to fund the insurance proposal, as well as a state construction program. Blagojevich’s plan to tax gross revenues of businesses appears to have little support among legislators, and other options, such as expanding gambling, are being discussed.

Senate Bill 5 would create three tiers of health-care coverage, providing insurance at a nominal cost to those with the lowest incomes, offering incentives for businesses to insure their employees and implementing low-cost plans for those with moderate incomes who are not covered elsewhere.

By approving Koehler’s amendments on a 7-4 vote, the committee placed the legislation in line for a final vote in the Senate. The remaining funding for Illinois Covered would be contained in other legislation.